Arabia, Duchess Saudia T.

Case Study 1: Malabon Marketing, Inc.

I. Point of View
Luis Tiongson, 24-year-old production manager of Malabon Marketing, Inc. He felt that each of
his two brothers had compelling arguments on his side.

II. Statement of the Problem (or Objective)

How can the Tiongson brothers come up to a decision for the future direction of the Company
that would increase its profit and maintain its financial stability?

III. Areas of Consideration

In May 1981, the surviving heirs of the founder of Malabon Marketing, Inc. should make a decision
for the company’s future and their individual fortunes. Arturo Tiongson, 38, the eldest of the three and
company president, was arguing for expansion of the candle-making business, via development of
decorative candles, which were premium-priced, high-profit items. Rodolfo Tiongson, 35, vice president
and treasurer, was in favor of expanding their selling and distribution of food product lines and wanted
to keep its candle-making business to its current level. The youngest brother, Luis, 24, production manager
was uncertain because he felt that each of his two brothers had compelling arguments on his side.
Malabon Marketing, Inc. was founded fifteen years ago by Mr. Lee S. Tiongson, a salesman working for a
Chinese-Filipino manufacturer of soy sauce. Mr. Tiongson bought a second-hand pitch shot display board
and made arrangements to be appointed as a separate soy sauce dealer in his locality. Upon his
retirement, he formed Malabon Marketing, Inc. and continued selling soy sauce. Gradually, the company
added other product lines and expanded its territory. Over a span of seven years, it added patis and
bagoong, laundry soap, sugar, detergents, canned meat, sardine s, biscuits, candies, coffee, and cocoa to
its line of products by applying as electrical distributor/wholesaler for various manufacturers. Soon it had
twelve delivery panels and a corresponding team of salesmen and merchandisers; it was covering part of
Metro Manila, Bulacan, Pampanga and Tarlac, as well as Laguna and Batangas in Central and southern
Luzon. In its seventh year, Mr. Tiongson started experimenting with the manufacture of candles. By 1978,
the candle business was outselling the grocery product line.

IV. Alternative Courses of Action

 Pursue the expansion of the candle-making business
Strengths Weaknesses Opportunities Threats
-Gradual increase in -the company has -The oil crisis will not -Other companies
profit limited funds subside and is likely to who have mastered
-In conflict with the worsen in the future the art of decorative
decision of Rodolfo -A Taiwanese candle-
candle-making and
maker will lend his
production supervisor have been selling
for two years for the them for years
company to make
 quality decorative -The company doesn’t
candles know how to make
-The venture can be and sell the
easily financed
decorative candles
because the branch
manager of the -It is risky to sell
equitable bank, something that would
Arturo’s compadre, either give a
can finance the
company up to P2
million
-The candle-making
business would
increase the
company’s profit
margin by 30-40
percent

 Undertake the expansion of grocery product distribution business and maintain the candle-
making business to its current level
Strengths Weaknesses Opportunities Threats
-Malabon Marketing -the company has -Other companies
Inc. is a well-known limited funds that offer more
independent soy -In conflict with the product lines
sauce dealer in the decision of Arturo
business industry
-Products were
bought from other
manufacturers at a
discount
- Continuous increase
in profit

 Careful analysis
Strengths Weaknesses Opportunities Threats

V. Recommendation